Brazilian Stock market plunges as Bolsonaro Backs Son’s presidential Bid
SÃO PAULO – Brazil’s Ibovespa stock exchange experienced its worst day since 2021 on friday, sinking over 4.3%, while the Brazilian real breached 5.40 to the dollar following former President jair Bolsonaro’s proclamation of support for his son, Flávio Bolsonaro’s, 2026 presidential candidacy.
The market reaction signals investor concern over Flávio Bolsonaro’s prospects and a shift away from Governor Tarcísio de Freitas, previously favored by the financial sector. Analysts suggest investors negatively perceived Bolsonaro Sr.’s withdrawal of support from Freitas, who is seen as more likely to implement economically liberal policies.
“Tarcísio has, for the financial market, this figure that he will solve this [promote economic policies more liberal] with a greater probability today than the current president,” explained Nomos’ investment director to “CNN Brasil.”
Regarding flávio Bolsonaro, the analyst stated he has “negligible chances of winning the elections” due to high rejection rates associated with the Bolsonaro family. “Tarcísio is a candidate who does not have a high rejection and, simultaneously occurring, captures a large part of the voters of the Bolsonaro clan.”
Gustavo Cruz from RB Investimentos noted, “the reading is that a son of former president Bolsonaro could reach the second round, but would not be competitive to win the elections. And the market prefers some of the governors.” Sérgio Vale from MB Associados added, “Flávio does not have a vision for the economic reforms that Tarcísio or other governors would have.”
A recent Datafolha poll reinforces the market’s assessment, placing current frontrunner Lula da Silva (PT) 15 points ahead of Flávio Bolsonaro (PL-SP). Lula leads Tarcísio de Freitas (Republicans) by 5 points and Governor Ratinho Jr. (PSD-PR) by 6 points.
The 2026 election remains over a year away, but the immediate market response underscores the critically important influence of presidential candidates on investor confidence in Latin America’s largest economy.
